Yesterday (Jan 17, 2017) there was a provocative headline in the Wall Street Journal: A Lower Peso Means More American Heroin Addiction.

If you haven't been paying attention to currency markets, and not too many have, the Mexican Peso has fallen by over 50% against the dollar over the last two years. That means that things made in Mexico and sold in the USA should be less expensive than they were prior to the drop in the Peso. As a simple example, if you visited Mexico and bought a $10 t-shirt in January 2015, that same t-shirt would cost less than $5 now.

Since most heroin in the USA comes from Mexico, the same logic applies. Anytime goods are less expensive, the demand for those goods goes up. People who may not have been buying before have less reason not to buy now that prices are lower. Its hard to imagine that anyone is going to start using heroin because prices fall 50%, but its easier to believe that people who were using pain pills, paying much more than heroin, might now be more tempted by switching to heroin due to the lower prices.

While abuse of any opioid is bad for your health, ingesting street heroin is by far the scariest. As has been reported endlessly these last years, heroin is often spiked with fentanyl, or worse, making dosing very dodgy.

I guess its possible, however, that if heroin itself is cheap enough, suppliers will not be tempted to cut it with more powerful fentanyl. A weak silver lining if ever there was one.